Nobel prize-winning economist Paul Krugman explains for the umpteenth time that climate action is super cheap — and that even the pro-pollution U.S. Chamber of Commerce agrees.

What would be the cost to the U.S. of moderate carbon pollution reductions, such as the emissions standards for existing power plants that the EPA will be announcing shortly? It’s a question that we always had to answer since, as everyone knows, EPA is legally obligated to issue rules regulating CO2 from existing power plants.

In April the world’s leading scientists, economists, and governments reviewed the literature and came to the broad consensus that even aggressive climate action would reduce the median annual growth of consumption over this century by a mere 0.06%. And that’s for a scenario in which the rich countries embrace rapid and sharp reductions in CO2, as opposed to the slow and modest reductions the EPA is seeking. Nor does that analysis factor in the hundreds of trillions of dollars of economic benefit from avoiding climate catastrophe — or the co-benefits of mitigation (such as reduced air pollution).

In May, the world’s leading energy experts said we are headed towards catastrophic 11°F warming but that if we wanted to keep warming to a far safer level, under 4°F warming, it would require investment in clean energy of only about 1 percent of global GDP per year through 2050. And that investment would be astoundingly cost-effective: “The $44 trillion additional investment needed to decarbonise the energy system … is more than offset by over $115 trillion in fuel savings — resulting in net savings of $71 trillion.”

Krugman explains that even the latest report by the U.S. Chamber of Commerce — “clearly meant to convey the impression that the E.P.A.’s new rules would wreak havoc” — actually shows the exact opposite.

Specifically, the report considers a carbon-reduction program that’s probably considerably more ambitious than we’re actually going to see, and it concludes that between now and 2030 the program would cost $50.2 billion in constant dollars per year. That’s supposed to sound like a big deal. Instead, if you know anything about the U.S. economy, it sounds like Dr. Evil intoning “one million dollars.” These days, it’s just not a lot of money.

As Krugman notes, our economy is at $17 trillion and growing. So “what the Chamber of Commerce is actually saying is that we can take dramatic steps on climate — steps that would transform international negotiations, setting the stage for global action — while reducing our incomes by only one-fifth of 1 percent. That’s cheap!”

Again, we’re talking about an analysis by the polluting industries showing a loss of 0.2 percent of income a year — without counting any benefit from slowing global warming or reducing air pollution or becoming a leader in what will be the biggest job creating industry of the century, technologies and strategies to cut carbon pollution. Doesn’t seem like a tough choice, does it?

What about the impact on jobs? You may recall that five years ago, Krugman explained how the climate bill being considered in 2009, much more stringent than EPA’s proposed rules, would boost economic growth because it would “create major incentives for new investment — investment in low-emission power plants, in energy-efficient factories and more” during an unprecedented economic slowdown.

In his new column, Krugman repeats that point. “The U.S. economy is still depressed — and in a depressed economy many of the supposed costs of compliance with energy regulations aren’t costs at all,” he writes. “In particular, building new, low-emission power plants would employ both workers and capital that would otherwise be sitting idle, and would, if anything, give the U.S. economy a boost.”

The Natural Resources Defense Council does the math in its recent economic analysis of the carbon rules, assuming they are written flexibly to encourage things like energy efficiency. NRDC finds that a well-designed rule “can save American households and business customers $37.4 billion on their electric bills in 2020 while creating more than 274,000 jobs.” This is a far more credible analysis then the one by the Chamber, not just because NRDC’s is actually consistent with the economic literature, but also because EPA appears to have been influenced by NRDC’s original proposals for how to do the rule flexibly.

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